Cavs, Clippers Finished 2016/17 In Tax Territory

Although last summer’s free agent period saw teams across the NBA engage in an unprecedented spending spree, four teams finished the 2016/17 season below the salary floor, and only two teams surpassed the luxury tax line and finished in tax territory.

With the salary cap having increased to a record-high level, most of the NBA’s teams were able to comfortably avoid spending $113.287MM and going into the tax. The two exceptions were in Cleveland and Los Angeles, where the Cavaliers zoomed past the tax threshold and the Clippers went a little beyond it as well.

The NBA will likely release official figures regarding this season’s taxpaying teams in July, but here’s our unofficial data on the Cavs and Clippers:

Cleveland Cavaliers:

• Total team salary for tax purposes: $126,696,581
• Amount above tax line: $13,409,581
• Projected tax bill: $24,773,953
• The Cavaliers don’t qualify as repeat taxpayers, since they didn’t pay the tax in at least three of the previous four seasons, so their tax rate is as follows:
  • $1.50 per dollar for the first $5MM over tax
  • $1.75 per dollar for the next $5MM over tax ($5-10MM range)
  • $2.50 per dollar for the next $5MM over tax ($10-15MM range)

Los Angeles Clippers:

• Total team salary for tax purposes: $114,740,032
• Amount above tax line: $1,453,032
• Projected tax bill: $3,632,580
• Unlike the Cavs, the Clippers do qualify as repeat taxpayers, since they were in the tax for each of the three previous seasons. As such, their tax rate starts at $2.50 per dollar.

The Portland Trail Blazers were the only other team in danger of crossing into tax territory, and after Maurice Harkless earned a $500K bonus at the end of the season, the Blazers came perilously close to that threshold. According to Bobby Marks’ data at The Vertical, Portland finished $4,462 shy of the tax line.

The Blazers didn’t sign a single free agent to a full-season or 10-day contract in 2016/17 after the season began, and it’s a good thing they didn’t. The one-day salary for a player with at least two years of NBA experience this season was $5,767, so even adding a veteran for a single day would have put Portland into the tax.

Once again, our data – and Marks’ – isn’t necessarily official, so we’ll wait for formal confirmation from the NBA this summer. But it looks like the Blazers just narrowly avoided becoming the league’s third taxpayer this year. Instead of paying the tax, Portland figures to be one of the 28 teams receiving a portion of the tax charges paid by the Clippers and Cavs.